Money Woes: Why Pakistan is pushing to outsource Islamabad Airport

The Pakistan government has been pushing for outsourcing the operations of major airports including Islamabad International Airport (IIA). The decision had been taken as the country faces a dearth of foreign exchange reserves. Finance Minister Ishaq Dar has already convened multiple meetings of the committee formed to engage foreign operators for outsourcing, Dawn reported. He told the stakeholders to finalise formalities to outsource the operations of Islamabad International Airport (IIA) by 12 August, the final day of the incumbent government’s term, Dawn, a national daily of Pakistan, reported quoting sources. On Saturday, the minister chaired a meeting of the steering committee for assessing the progress of airport operations outsourcing. A source privy to the meeting told Dawn that the committee had given explicit instructions to complete the necessary procedures for IIA outsourcing as a priority. An official announcement issued after the meeting said World Bank’s International Finance Corporation (IFC), the transaction adviser for the outsourcing, briefed the meeting on the progress.

Finance Minister Senator Mohammad Ishaq Dar chaired meeting of Steering Committee to Oversee the outsourcing of airports operation which was attended by Aviation Minister Khawaja Saad Rafiq,SAPM Finance Tariq Bajwa, SAPM on Govt Effectiveness Jehanzab Khan, (1/3)... pic.twitter.com/72hcBvQLNC

— Ministry of Finance, Government of Pakistan (@Financegovpk) July 12, 2023

Dar wants changes to aviation laws approved before month-end. The meeting agreed to fast-track IIA’s outsourcing to improve service delivery in line with best industry practices, Dawn reported. The IFC also gave a presentation to the committee which also took decisions on the future roadmap of outsourcing IIA operations. Outsourcing management The Pakistan Civil Aviation Authority (PCAA) informed the National Assembly Standing Committee on Aviation on Thursday that the government has started a process to outsource the management and operations of the airports in Karachi, Islamabad, and Lahore. The committee was informed that PCCA was not selling the airports and that only the operation and management controls were being outsourced. PCAA Director General Khaqan Murtaza informed the committee that, following a change in regulation 68 of the CAA Act, the authority to issue no-objection certificates was transferred from the PCAA to the building control authorities, who had entirely failed to do so. The committee also proposed a change to the rule, requesting action against unauthorised constructions, reports Dawn. He added that Pakistan International Airlines’ financial condition cannot bear much expenses so they have hired a contractor for the transport purpose. [caption id=“attachment_12874492” align=“alignnone” width=“640”] On 31 March, the Economic Coordination Committee decided to kick off the 25-year outsourcing of operations and land assets at Islamabad, Lahore, and Karachi airports. Reuters[/caption] On 31 March, the Economic Coordination Committee decided to kick off the 25-year outsourcing of operations and land assets at Islamabad, Lahore, and Karachi airports. Their functions will be run through a public-private partnership to generate foreign exchange. Pakistan has been negotiating the deal with Qatar for several months. Eliminate overlapping responsibilities In the meeting on Saturday, Dar also gave a deadline to departments concerned for finalising amendments to civil aviation laws and a plan for Pakistan International Airlines (PIA) restructuring, Dawn reported. The amendments are being made to segregate the functions of the Pakistan Civil Aviation Authority, PIA and Airports Security Force. The objective is to eliminate overlapping responsibilities of these organisations by enacting ordinances. The minister emphasised getting amendments approved by the parliament before the end of July. This timeline is crucial as it would allow global aviation regulators to dispatch inspectors in August for an on-ground assessment of operational systems and standards necessary to restore PIA’s flights to the US, UK and Europe. Failure to meet this deadline would result in a year-long delay before the inspections occur, Dawn reported. PIA’s flights to these destinations have been suspended since 2020 following a controversy surrounding pilots’ professional degrees and other aircraft safety standards. The meeting chaired by the finance minister was also attended by Federal Minister for Aviation and Railways Saad Rafique, Special Assistant to Prime Minister on Finance Tariq Bajwa, the Aviation Division secretary, Public Private Partnership Authority CEO, PCAA director general, IFC representatives and other government officials. With inputs from ANI